Aging population emphasizes our heavy dependence on government

Take one of the things on which Canadians pride themselves— one thing that we see as making our country special — and declare it at risk. Show that if we don’t make changes, we’ll lose it.

That’s basically what management consulting firm Accenture has done in a report released Tuesday, which sounds alarm bells about this country’s ability to maintain current levels of public services as the population ages — and the number of Canadians who are 65 and older increases significantly. The central finding is that Canada’s governments (federal, provincial and municipal) will be looking at a $93-billion shortfall by 2025 unless they cut back on services, or find another way to make or save the extra money. Good grief. Who knew that older people were such services hogs? Health care, pensions, you name it — according to the Canadian Press, on average it costs about $8,700 a year more for government to accommodate someone 65 or older than it does to accommodate someone 64 or younger.

It would be a lot more alarming, though, if not for the fact that the Accenture report also provides a solution — one that doesn’t involve taxing Canadian businesses and individuals into oblivion. The current level of services can be maintained with no tax increases, it says, if inefficiencies at all levels of government are reduced by 0.9% every year. What? Public services inefficient? What can these Accenture people be thinking? Well, exactly the same thing that a lot of Canadians are thinking, as it turns out. “According to our Ipsos MORI survey,” Accenture says, “37% of Canadian respondents believe that a top priority for their government should be to provide services in a more cost-effective way.” The Accenture report focuses particularly on the government’s “aging IT environment,” which it says is “has become a genuine barrier to transformational change.”

The obvious first reaction should be action — insisting that the government follow through by finding those small ways to increase efficiency and exploit the savings that going digital can produce. No more whining about the demographic shift, please. Treat it as a helpful way to give the government the kick in the behind it needs to do something it’s not very good at, and usually has little incentive to aim for: streamlining. Accept no talk of increasing the tax burden until those changes have been made.

And the second reaction? The interesting thing to me is that the Canadian Press story about the Accenture report covers two ways to deal with the shortfall: find efficiencies in the delivery of public services (this is the Accenture recommendation), or bring in more revenue through taxes (this is the advice of a senior economist with the Canadian Centre for Policy Alternatives, whom CP quotes). But there is another possibility: Government really could decrease the level of public services.

Given the degree of pride, not to mention entitlement, Canadians feel about the social supports they receive through government, I’m not surprised CP didn’t feel the need to explore cutting services as a viable option. But Canadians should at least keep it on their radar. A sensible second reaction to the Accenture report would be to ask, which of these services is not just nice to have, but truly necessary to maintain the society we want to have? Could we keep those and dump the rest? And of those services that are truly necessary, could any of them be delivered better by private charities or agencies?

Government’s depth of involvement in Canadians’ lives is often complained about when it comes to police action or, yes, taxes. But we are partly to blame for this too-close-for-comfort relationship by so often assuming that we cannot survive without everything that government currently gives us. And assuming we’d be better off with more. What might happen if “maintaining current levels of public services” were seen by Canadians and the Canadian media as one option, rather than the only option? The policy possibilities could be eye-opening.